EL 90 | Draghi’s Pragmatic Federalism: the path Europe must follow to escape the impasse
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Today, Europeans find themselves, for the first time in recent history, “alone together” in facing a world order that no longer guarantees their prosperity and security. With the United States stepping back and growing pressure from Russia and China, the citizens of the European Union can no longer afford to remain paralyzed by inefficient decision-making mechanisms and by the constraints imposed by the veto right. To overcome this deadlock, the path outlined by Mario Draghi is not to wait for unanimous consensus, but to form a vanguard of countries willing to immediately embrace the path of “pragmatic federalism.” Only through a coherent project led by the most forward-looking countries will Europeans be able to pool resources and sovereignty in vital sectors such as defense, energy, and advanced technologies, ultimately turning the current crisis into a new opportunity to refound their union.
“For the first time in living memory, we are alone. Or rather, we are alone together.” With these words, delivered upon receiving the Charlemagne Prize in 2026, Mario Draghi once again sought to shake European leaders out of their complacency. Speaking in the presence of German Chancellor Friedrich Merz, Draghi reiterated his diagnosis of the international situation and outlined the solutions necessary to overcome Europe’s current impasse.
“The world that helped Europe generate prosperity no longer exists.” Donald Trump’s United States has progressively abandoned its traditional role as guarantor of the international order and is pursuing an increasingly confrontational policy towards Europe through the imposition of unilateral tariffs, threats against Greenland, a gradual reduction of its commitment to NATO structures, and its substantial disengagement from the conflict in Ukraine. At the same time, China is using its immense economic power to expand its geopolitical influence across all continents, support authoritarian powers hostile to European interests, beginning with Russia, and put pressure on European industry through its extraordinary productive capacity, its near-monopoly over rare earths, and the significant technological advantage it has accumulated over the past decade. In the background, Russia continues its neo-imperial project through the war in Ukraine, while the international landscape is further destabilised by tensions in the Middle East and the progressive weakening of multilateral institutions.
This is an extremely dangerous moment for the European Union, but it may also represent a turning point. The new geopolitical conditions force public opinion and national leaders to question the model that has guided European integration over the past thirty years: the construction of a vast market largely deprived of the attributes traditionally associated with statehood; an economic model based on exports; a structural dependence on external powers for security and energy supplies; and a chronic underinvestment in strategic sectors, which has steadily widened Europe’s technological gap vis-à-vis its main global competitors.
Europe urgently needs a change of course. The resources and capabilities necessary to overcome the current impasse already exist, but they must be mobilised. The measures required are well known and Draghi has outlined them repeatedly, most notably in his report on European competitiveness. Once again, in Aachen, he recalled the key priorities: the Union must mobilise resources on an unprecedented scale, redirecting towards productive investment within Europe a significant share of European savings that currently finance the American economy; it must complete the single market by overcoming the fragmentation that still affects energy, finance, telecommunications, and services; it must create a European demand capable of sustaining strategic industries and fostering the emergence of continental industrial champions; it must close the technological gap through massive investments in digital infrastructure, data centres, artificial intelligence, and advanced technologies; and finally, it must reduce its strategic dependencies, both in the field of energy and in relation to critical raw materials and technologies essential for the green transition, thereby strengthening its economic, industrial, and geopolitical autonomy.
Yet this is not the central message of Draghi’s speech in Aachen. The problem is no longer understanding what must be done; rather, it is understanding why Europe continues to fail to act, or at least why it fails to act with the speed and determination that circumstances require. Draghi’s analysis is uncompromising: the real obstacle is not a lack of political ambition, but the decision-making mechanisms that transform decisions into concrete action. “Agreements are developed through committees that dilute and delay them until the final outcome no longer resembles the original objective. The result is action so inadequate to the scale of the challenge that it becomes worse than inaction.” This creates a vicious circle in which “weakness in implementation erodes legitimacy, and weakened legitimacy makes implementation even more difficult.”
Breaking this cycle requires a strong political initiative. A group of countries that share an awareness of the gravity of the situation and the ambition to relaunch the European project must be willing to move forward together. Draghi calls this approach “pragmatic federalism”. Its model is the single currency, arguably the most successful example of differentiated integration in European history. Faced with the impossibility of reaching unanimous agreement among all Member States, a group of countries decided to move ahead with monetary unification, creating new institutions endowed with real powers. The European Central Bank is not merely a coordinating body for national central banks; it is a genuine sovereign authority capable of adopting binding decisions affecting hundreds of millions of citizens.
Draghi’s pragmatic federalism follows the same logic. It does not begin with a grand institutional reform requiring unanimous approval. Instead, it starts by identifying common strategic interests—defence, energy, innovation, advanced technologies, and access to critical raw materials—and by creating European instruments among a compact group of Member States willing to act effectively in these fields. The objective is not to circumvent the European Union, but to enable it to evolve through tangible results.
The novelty of this approach lies in its attempt to overcome the traditional opposition between Europeanism and intergovernmentalism. For decades, the European Union has been paralysed by the effort to reconcile the ambitions of those Member States favouring deeper integration with the resistance of those that remain sceptical or openly hostile to the European project. The result has been an extremely slow decision-making process, in which unanimity has been achieved only in exceptional circumstances, such as the creation of common debt during the pandemic. Draghi proposes a third way: gradually building new European capacities among a group of willing countries in strategic sectors, allowing the success of these initiatives to strengthen their political legitimacy over time.
In this sense, pragmatic federalism differs both from sovereignty-based nationalism and from traditional Europeanism. It differs from the former because it rejects the notion that nation-states can face the challenges of global competition on their own. It differs from the latter because it recognises that the functionalist method that has guided integration over recent decades is reaching its limits. The question is no longer whether Europe needs more integration, but whether that integration can be achieved quickly enough to allow Europe to remain a relevant actor on the international stage.
This is probably the deepest meaning of Draghi’s speech in Aachen. In an increasingly competitive and unstable world, Europe can no longer limit itself to defending the status quo. The most far-sighted political leaders in the Member States, with the support of the European institutions, must equip themselves with the tools necessary to act. To do so, vision and pragmatism must be combined: federalism provides the direction by clarifying the ultimate destination and, consequently, the method for reaching it; concrete challenges determine the agenda, from defence to technology and energy. Only by recognising that responding to existential challenges ultimately requires a federal destination, and by launching a coherent avant-garde project capable of producing effective responses, will Europeans be able to “once again transform crises into union.”